Current Account Charges - Why I have no sympathy

CopperPlate_2

Public perception, public relations, the volume of claims being made makes it extremely diverting for the organisation to defend fully, the list goes on.

I find that the views of some are contrary for the sake of it. Inmypocketnottheirs, YorkshireBoy is actually looking at both sides of the argument here - by agreeing that you have a point in essence that the level of the charges is unfair (unlawful, call it what you will, although that word is used too freely to describe something that some people think is unfair and unjustified simply because it has a penalising effect on them) yet you come back with the rejoinder that he thinks the charges lawful until a judge finds otherwise? I can't ever remember seeing him say that he thought them lawful?

inmypocketnottheirs

CopperPlate wrote:

Public perception, public relations, the volume of claims being made makes it extremely diverting for the organisation to defend fully, the list goes on.

I find that the views of some are contrary for the sake of it. Inmypocketnottheirs, YorkshireBoy is actually looking at both sides of the argument here - by agreeing that you have a point in essence that the level of the charges is unfair (unlawful, call it what you will, although that word is used to freely to describe something that some people think is unfair and unjustified simply because it has a penalising effect on them) yet you come back with the rejoinder that he thinks the charges lawful until a judge finds otherwise? I can't ever remember seeing him say that he thought them lawwful?

Infact, copperplate, you are correct. Having re read YB's post, he only says that I can only 'think' they can be unlawful. This is I think a debate about the issue, one of which I happen to feel very strongly about.

At the crux of my feelings is the belief that major institutions should be open and honest in their dealings with their customers. If their actions are spurious and on the edge of the law, then they need to be 'reigned' in. If their actions, on the other hand, are fair and above board, in my opinion (and it is only an opinion) then they should have the courage of their convictions and play the claim out in court.

I for one commenced a claim against my bank, and would have been more than happy to go to court, but I was denied the opportunity of doing so.

I would like to state, that on https://www.consumeractiongroup.com there is a wealth of legal opinion (minds more legally experienced than mine) that happens to support my view.

So there we have it, one side of the argument 'thinks' it is unlawful and the other 'thinks' it isn't. Until it is proven one way or the other, that is the only solution we can have, I guess!

CopperPlate_2

inmypocketnottheirs wrote:

So there we have it, one side of the argument 'thinks' it is unlawful and the other 'thinks' it isn't. Until it is proven one way or the other, that is the only solution we can have, I guess!

At last, a glimmer of commonsense on this thread

inmypocketnottheirs

CopperPlate wrote:

At last, a glimmer of commonsense on this thread

A contraversial subject I think!

westernpromise

MPH80 wrote:

NO - any organisation is allowed to place a charge for breaking a contract - it is the LEVEL of the charge which is believed (and it has NOT been proved) to be illegal because the banks have not proved that the level of the charge reflects the cost to them.

There is also the possibility that a bank might believe the cost justified, but be reluctant to go to court. A court will expect the bank to produce proof of these costs, which entails disclosing quite a lot of confidential management information.

A few years ago I worked for an oil company which loaned money to customers in exchange for 5-year supply contracts. We had no right to insist on supply if a dealer breached his contract, we just had the right to sue for our loss for the breach. Since proving our loss would require us to reveal our margins, we never ever pursued anybody when this happened.

If this is what is going on here, it would mean the charges are unenforceable practically, rather than legally.

Tim_L

Not very likely though.

The banks are not being asked to produce commercially sensitive information on profit margins, they are simply being asked to justify the level of a charge and to show it has no penalty element. This really involves nothing more than explaining what level of staff cost and infrastructure cost is involved when accepting a payment over a pre-arranged limit. If anything more than costs is claimed, then these charges are unlawful.

If only costs are reclaimed, then there's really no question of charges generating profit, so they can't really be used to subsidise the banking of the prudent finger waggers, which seems to be what they are worried about. Or have I missed something?

If these claims were uneconomic to pursue, why do the banks go through all the rigmarole of setting up an initial defence before capitulating? There's a good deal of expense and time involved here, but it does give the impression of sabre rattling to scare people off. Banks have extensive in-house legal expertise and presumably have a good idea of what the situation actually is, so if they have a case they should put it before the courts.

Of course the stakes are high. If the banks lose a single case, even in a court where no precedents are set, the effects will be very far reaching and expensive for them. If they win one case, of course, then the claims will stop. But all they have to do to win is to reveal the relationship between their costs and their charges.

So maybe rather than posting here, the apologists for the banks would do better to contact their own bank and persuade them to actually conclude a case?

In the meantime, and returning to the title of the thread, sympathy is not necessary, since the charges are being repaid.

westernpromise

alexjohnson wrote:

Look, no one is saying hard luck cases don't happen. And there are other cases where people live beyond their means and are quite publicly in the process of coming to terms with it, or equally publicly in denial. I don't think anyone wins by point-scoring in such circumstances.

The trouble is, banks add charges to accounts without considering any circumstances at all. It's all automated - which doesn't stop them charging as if there had been a lengthy and costly process of review by a senior manager. If they charged you the 35p or so that costs, rather than the £35 or so they reckon the market will stand, we wouldn't be having this discussion.

The Midland did exactly what I previously described to me, when I was 22. I was a sales rep and had to post a hard copy of my expenses each month to my line manager, who then posted them to head office. This process could not be started until the 1st of the month and they had to be in by the 10th. If the post was late, or he was slow, or whatever, my expenses could get paid late. Which is what happened, and the Midland took around £400 in charges off me over the course of a year - of which all but the original £10 were in fact charges for having incurred charges.

In my experience, this is pretty typical; if you are in marginal circumstances, banks will unhesitatingly make them worse. If the behaviour banks display - greed, self-interest, obstinate refusal to see the other party's point of view, habitual deceitfulness, etc - were displayed by a person, we'd regard such people as certifiable sociopathic loonies.

dchurch24

May I just add quickly that although not proven in court to be punitive in nature - it is surely just common sence that to NOT pay a direct debit does not cost £39 (RBoS, Natwest).

There is also a public admission that the charges are a deterrent and fuel profits from the ex-head of Lloyds TSB. So while not proven in a court of law, it is certainly proof that the charges do not reflect the costs.

dchurch24

ironic wrote:

Thirdly, the fact a bank will honour payments is important. For example would you rather the bank did not pay your mortgage?

If you don't have it, don't spend it! Is it just me that thinks this?

These two statements are quite oxymoronic.

I WOULD rather they didn't pay my mortgage - that way, if I don't have it, I haven't spent it. Sadly, for not spending what you don't have, you will also be charged an extortionate fee.

The fact that the bank 'allows' it, means that it's not an 'unauthorised' overdraft is it?

I remember it being that way about 10-15 years ago. If I didn't have the money, it wouldn't let me withdraw it, or pay any type of automated payment from my account.

Why change that? Ahh...I know...to make a profit from the penalties.

Paul_Herring

dchurch24 wrote:

The fact that the bank 'allows' it, means that it's not an 'unauthorised' overdraft is it?

Of course it doesn't. If you remove the scare quotes.

If you haven't signed anything to say that the bank understands you have that overdraft and are allowed to use it in normal day to day banking, it is unauthorised. Just because the bank authorised the *transaction* doesn't give any authenticity to the state of your negative bank balance.

I totally agree with you on why they do authorise the transactions however.